The uncertainty in the business environment lingers as tax reforms hang, aggravated by the global concerns due to the US-China trade war.
In a press conference at the sidelines of the Arangkada Forum in Pasay City yesterday, the Joint Foreign Chambers (JFC) conveyed that the general sentiment of foreign investors is to “watch and wait it out” while all of these unfold.
The JFC reiterated its position on the Corporate Income Tax and Incentives Rationalization Act (Citira) where they want to see faster reduction of the CIT rate.
Julian Payne, president of the Canadian Commerce of the Philippines warned the Philippines may be “rationalizing” itself out of competition with its plan to overhaul its incentive system.
John Forbes, senior adviser of the American Chamber of Commerce of the Philippines, said six US companies pulling out their operations in another Asian country are looking at Thailand and Malaysia now that the “tax liability” in the Philippines remains uncertain.
Payne said foreign businesses view the CIT rate cut from 30 percent 20 percent as a “big help,” but they want the reduction done fast because after six years, the Philippines’s CIT rate will still be the highest in Asean.
“The issue of rate of reduction is significant as this will affect how companies move…,” he added.
He said the incentive rationalization should take into account how this will affect the competitiveness of the country as an investment destination vis-à-vis other Asean countries.
“You have to be extremely careful,” Payne added.
Keiichi Matsunaga, president of the Japanese Chamber of Commerce and Industry of the Philippines, for his part said investors from Japan need to see quick decisions and solutions on business concerns like tax reform.